Atom: Hi and welcome to BitTalk, a weekly podcast on news and happenings in the world of Bitcoin. I'm your host Atom..
Atlas: .. and this is Atlas, your co-host and you may previously know me from the original Bitcoin podcast. So we're essentially a podcast all about Bitcoin, and for those who are new to Bitcoin: Bitcoin is essentially a decentralized digital currency, and it's dependent on the people and it's for the people not by centralized organizations such as central banks or governments. Atom: It's basically the people's money and the reality is that we as the people have the opportunity to either make it succeed or not, you know? So we're going to get into more details about what actually constitutes Bitcoin and what actually makes up the protocol and things like that because it's a fairly complex topic being, you know, money. Money is a fairly complex topic we just usually don't talk about it. But anyway so we're going to get into that in an episode coming probably a week or two down the line that'll be a primer on Bitcoin. But for the purposes of this first show we're just going to dive right into the news and start talking about the events and happenings. So uhh, stay with us! Let me just say right up front that if you have any comments or questions you can send those into us at RadioBitTalk? BitTalkRadio?
Atlas: BitTalkRadio at Gmail dot com.
Atom: BitTalkRadio at Gmail dot com, okay I'll get used to that one. Atlas: Right on the BitTalk.tv there's a contact link you just click that right there and you can contact us on Facebook, Twitter, Email, whatever rocks your boat. Atom: Yes, indeed.
Atlas: So in most recent news, Bitcoin difficulty has jumped up sky fucking high from 877,000 to 1,379,000 in terms of... I don't know what those numbers exactly represent but it's network score difficulty, so now instead of getting say about half a Bitcoin today you're probably going to be getting about .10 Bitcoins a day if you're mining through your computer. So this is pretty big for the community in terms of the price of Bitcoin, it's value and so forth so we might be seeing exchange rates going pretty high in the next couple of weeks. Atom: Well it's a maturation of the market is what it is, you know I mean that's one of the things that really attracted me to Bitcoin initially is that you know you've got this supply that is very clearly defined so really the only question is what is demand going to do. You know because if the supply stays the same but demand goes up then, I mean, we know what happens there: the price goes up, it's pretty simple. Atlas: And the demand seems to be really high with the set community we have, about 100,000 or so hence why we've seen so much mining, because I really doubt these people mining are just out to get a quick buck and sell it on the markets, you know? Well, maybe I'm wrong - is that how it is right now? Atom: You know, I think it really goes both ways: I think you've got people who are looking at this from the long-term but I think there are a lot of people out there who are viewing this sort of just as a temporary phenomenon and what we're going to see is a collapse after this, but again it goes back to the fundamentals of it for me... which is that you've got this inherently finite supply and what you're talking about is an illustration of that. You know, is that because we've had such an influx of miners and actives and you know, people expanding their operations and the move to GPU processing instead of CPU processing, basically what that's done is it's made it so that there are a lot more people competing for those same Bitcoins, so as the difficulty goes up then you're going to start seeing them dropping out or the technology increase with it. I think this is really not so much of a problem for most people out there, you know. You can still mine with pools but as the value goes up I mean really, what would you rather have: One Bitcoin, or rather a tenth of a Bitcoin when they're worth $17 or a whole Bitcoin when they're worth a dollar. The numbers make sense for me.
Atlas: Well what brings up another concern is that all the Bitcoin supplies being hoarded within a certain niche of individuals, you know the regular people are only going to have just Bitcoins when they see they want to spend them online with exclusive Bitcoin retailers, and the hard-core people are going to be the ones with so many Bitcoins - and since there's a finite supply, you have a lot of geeks that are just controlling the economy and that's a concern that's brought up with a lot of people: is Bitcoin truly decentralized if there's a few that own the most of the block chain? Atom: See now, this is another area where you and I differ: I think that it's invigorating. I think that that is a very exciting development and I'm actually quite new to the market, you know I just have... I'm holding 20 Bitcoins at the moment, and I have been struggling to fund for the last month or so, so this is something that I looked at you know, maybe 6 months or 9 months back and sort of went like... "no, not really that interested" - didn't really see the point, but now that I see, now that I've read the whitepaper on it, now that I understand how the protocol works a little bit better it really does seem to me that this is just the future of it. But I actually completely forgot what you said Atlas? Atlas: Uhh, I was speaking of how a few will own most of the Bitcoins in the market but you know there's something called the 80/20 rule, and that just means, how, the tragedy of the commons of Bitcoin, you know? I never really advocated that Bitcoin should be evenly divided among people, I'm really not on either side I'm just stating matter-of-fact that quite a few people own a majority of the block chain, I mean I hear that like Satoshi has like 5%, 10% of the whole chain? I mean, I don't know. Atom: Well I mean I think that I can certainly see how there would be concerns about manipulation but the question is what's the benefit? You know? If the market gets flooded, then that means someone... you know if someone cashes out let's say 25% of the Bitcoins in existence, you know I mean then certainly that floods the market but it's not like that supply is indefinite - it's not like that can keep happening, so that's why we're going to get into the conversation around Mt Gox, but there's a lot of concern about a real crash. I mean, why be concerned about a crash when the value has to come from somewhere in order to buy all of these things.
Atlas: Yeah, absolutely, and I mean it's a one-shot gun, you know? If someone has like a million Bitcoins , and they sell them on the market, then that's it: they can't do any more damage to the economy.
Atom: Right exactly. Atlas: ... and it just redistributes to everyone else, so if anything it actually helps the whole cause in the end, you know? Atom: Well, you know it always pays to play the contrarian in things like this and the the thing that I've seen is everybody out there is trying to play the contrarian - everybody out there is saying "oh yeah, man this security breach is going to be terrible for everything and that's when I'm going to buy", and so the fact that everybody's saying that to me says that, you know, this is the beginning and not the end. I'm very excited, but getting back to what you were saying earlier in terms of more people, in terms of a small number of people holding a large number of the curency, you know... I think that that's something that will be solved once you have the marketplace start to kick in more. We've already seen it happen, you know, and you can already look at sites like Bidding Pond, Bitcoin Hop, and there are a couple of others out there that have auction sites going on. Really, I mean if you look at those auction sites what you'll see is that there's a huge number of people trying to sell stuff - it's not a huge number of people, but relative to the amount of people who are trying to buy stuff with Bitcoins? You know the market, I mean, people want Bitcoins and it is hard to get them. If you have to fund through one of the exchanges, trying to go through Mt Gox or something similar to that.. the only option for a lot of people out there is to go from US dollars or whatever your local currency is to Liberty Reserve and then transfer from that into Mt Gox and then make your purchases there (or any other exchange for that matter). Atlas: See that's where I'm kind of confused with all this, you know... I mean I haven't really gone into merchant accounts or how banks work but why isn't there anybody that just accepts credit cards outright and allows them to buy their own virtual form of US Dollars on their site, and sell them back and forth. I mean, are credit cards just as bad as Paypal when it comes to chargeback requests? Atom: Uhh, well the deal is that most of them just won't do business - that seems to be what's happening here is that companies like Paypal are adopting stances that are staunchly and blatantly antiBitcoin. So uhh, basically if there is any sort of question about "okay well was this transaction okay?" If someone buys Bitcoins with Paypal - I actually ran into this problem because I tried to do it, I tried to buy Bitcoins with Paypal but nobody would sell them to me, because the problem is that if you report that it is a bad transaction or that they scammed you or something like that then Paypal just automatically sides on the side of the buyer. So that doesn't necessarily sound like a bad thing but then you look at that Bitcoins are irreversible, so once that transaction goes then if they can go, you know 10 days later or even a little bit later that day and say well you know "Paypal! Paypal! They scammed me!" then Paypal doesn't even investigate it, just automatically refunds the person their Paypal and then they're still holding the Bitcoins so it makes it super-easy to scam and basically destroyed that as a venue to do it. So really what we're seeing here is very aggressive policy moves by some of the payment sites, and I believe Mastercard did it too. Atlas: I see, well you see that reminds me that Wikileaks recently called that Bitcoin itself will not be the future of online marketing, they say that Bitcoin will act itself as like the gold of the all-digital currencies and digital transactions - what they wanna see is a sub-currency of Bitcoin to just work for regular people like Mom and Pop so they can do transactions on the web, and they say oh, they didn't like the product or whatever they can just reverse the transaction. I guess they have a good point there, I guess there is sometimes a call for reversible transactions, but not when it comes to the first line of value. Atom: I think Wikileaks has all hat, no cowboy... that's what I think about them, they've been talking a really big talk for quite some time and they've really released very little. I mean, we were supposed to see lots of documentation on... Adrian Assange said that they had a series of bomb shells on Bank of America and never actually ended up releasing anything at all. So I mean, I think that you're going to see lots of people calling for central control of this, I think that's going to be the move because really that's the only way that it can be co-opted. If you have a new currency that's derived off of this that has the ability to be centrally controlled - which Bitcoin essentially doesn't outside of the entire network colluding to accomplish that - then you know, but I mean I think that's it's key selling point frankly. Atlas: You see once you get Bitcoin centrally controlled, it's not Bitcoin anymore.
Atom: Right, exactly, so if you're going to do that then why not have anything else. Atlas: And since it's open source software you can just see some people make another chain, you know I think we really have reached a singularity here. I think there's no turning back: people are going to want decentralized money, they're going to realize this is the best form of money and where to keep their wealth and labor in, and there's just no stopping it - even if the government were to take down the current Bitcoin right now, something else is just going to show up. Atom: Right.
Atlas: You know? It's decentralized all the way down.
Atom: Right, exactly. I mean you can fight progress certainly, but eventually... eventually unsustainable systems no longer function, and that's really where I think we are now. That's why Bitcoin and so many other currencies are so attractive, you know not even currencies I'm talking about commodities, I'm talking about silver, you know various other things. For God's sake I stocked up on grain six months ago, and I'm glad that I did because we use it and frankly it's a lot more expensive now than it was then. So I think that that's the key driving factor here is that fiat currencies, which are the standard currencies across the world, are just fundamentally not safe to have your money in as an invididual. If you want to retain your purchasing power, if you wanna still have the same amount of money that you did today in a week or two weeks, then the only way you can do that is by getting into something that isn't constantly being printed to pay for someone else's debts. Atlas: Well you see the liberals are still stuck on fiat currencies though because they still want to see the government be able to inflate the currency because just based on... they haven't seen the contrary really, we haven't had a standard, set, non-inflationary currency in our society, so they claim that a non- inflationary currency (if Bitcoin becomes the standard) we would go to the dumps in their view. Is there really anything backing this? That's my question. Atom: Well, this is definitely a conversation to have...I think that Bitcoin is a really interesting project in that no, nothing is backing it. There is nothing intrinsic, you can't eat it you can't really... even with with gold, while you couldn't necessarily get the current price that it's at now which is about $1500/oz, for it's actual practical uses which would be jewelry or electronic connections, things like that... at the sametime it still has something so it will probably never go to zero. Bitcoin does have the potential to go to zero if there is complete abandonment, but outside of complete abandonment there really isn't that much of a problem because it's not a fiat currency. This is the dichotomy that people have to understand is that it's an un-backed currency - there's nothing backing it-. Atlas: Well, I'm just gonna correct you there is one thing that's backing it, that's it's future... it's feature of being an online transaction tool, it's only intrinsic value is that it can be used as a tool. Atom: Oh it's fantastic money, don't get me wrong. Don't get me wrong: It's fantastic money, by all of the definitions, the requirements that make something a good source of money: it's durable and divisible, you know? People talk about the finite number of Bitcoins, you know the 21 million, and somehow say "oh, well, that's a problem, that means that no one's going to be able to afford a Bitcoin once everybody gets into it" but the reality is that Bitcoins, unlike just about anything else, because of their virtual nature are divisible down to 8 decimal points.
Atlas: Well even more, it's infinitely divisible, if a protocol change is really called for... Atom: Right.
Atlas: ... People can change it to go as low as like... it's really truly infinite. I had a huge argument about this on Reddit and they said "no, it's not truly infinite because it would require a protocol change", but if people really needed to divide it and they can't buy a loaf of bread with anything less than a $100 unit, you're going to.. yeah.
Atom: This actually brings us back to something else... but no I forgot, so you go ahead. Atlas: Oh well, we were talking about... let's just go back and talk about.. see even Amir Taaki (he's one of the developers) says that there will still be centrally controlled money, and that there will still be fractional reserve central banks and such, even if Bitcoin becomes the standard and I absolutely do not understand that. Apparently he sourced this from an Economist called Ben Friedman who said there will still be fractional reserve banking with fiat currency. Atom: You know why? Atlas: Why?
Atom: Because it's profitable. Atlas: -LaughsAtom: I mean seriously that's the... think about it like this: given the choice between having to purchase Bitcoins and then lend out those Bitcoins that, you know, you've purchased... isn't it much easier to instead just create dollars out of checkbook money and loan that out instead, at interest? I mean if you actually have to pay for something then there are real costs associated there, but you know if you pay nothing for your money, if you just create it then, well, you know 5% from no investment - I mean that's pretty good. Atlas: Yeah, I mean, I'm not saying that fractional reserve banking will cease to exist, I'm saying for centrally controlled lending practices. I believe he claimed those would still exist, if Bitcoin became the standard and I don't understand that absolutely at all, because people will want to store their wealth in something that keeps it's value, not in an inflationary currency that deduct slowly over time, you know? People are going to put their savings in Bitcoin, I believe, in the long run... unless I'm wrong. Atom: Yeah, unless everybody's wrong. You know... I don't think we can tell the future, I think that Bitcoin, of all the currencies I've looked at (and I've looked at many currencies), it has very, very attractive features. It has... we're past the first bump, the first phase where nobody knew about it, we're getting into the next part, but this is a bull market in Bitcoin and I for one am very excited to be a part of it. Atlas: Yeah. I was glad to be a part of it a year ago when it was just so small, it was literally just... the only thing you could buy with Bitcoins was pencils, Spongebob stickers and stamps... and I was like "oh this is such a fun toy", you know it felt like a Chuck-e-Cheese almost. Atom: Mmm hmm. Atlas: ... and you know I couldn't see it any bigger than that, I didn't really, fully realize the potential it had until a year later, and I'm like "oh man, I deleted over a thousand Bitcoins because I got bored of the whole thing." Atom: Yeah, well, you learned your lesson there! I think everybody throws away money a couple of times. Atlas: That's why I'm wondering is those... 80% of the Bitcoins aren't circulating, so like are a good portion of those just really early adopters like me from a year ago, who just gave up on it and it's just sitting on a dead hard drive somewhere? Or is it just people that are just hoarding because, you know, they see so much potential. Atom: Well you know I actually see some of it coming out. I traded some silver on one of the bidding sites for some Bitcoins, and the guy who wound up purchasing it hadn't used Bitcoin on that computer for like 2 or 3 weeks so it took a while for it to propogate... for the payments to propogate. So I do think that people at this rate are starting pull them out and starting to put them into the market, but I think that the demand for them is just so much greater. I mean, you look at these boards and it's very clear that people definitely, definitely want Bitcoins... but beyond that, I think the really interesting thing is that, you know, right now everybody's talking about this system like, relative to the US dollar... but I think there's a case to be made that once we expand the services that are available for Bitcoin that that connection isn't necessarily required. I mean, Bitcoins - once they get off the US dollar, I mean that's what we're talking about. We're not really necessarily seeing all this volatility as a direct result of market volatility, and people buying and selling and "oh my god the price is so crazy it keeps changing" it's also because the US dollar is constantly being devalued which is encouraging people into the currency, and so you know... it's a complex issue.
Atlas: Very interesting point, I haven't heard that before, that that's actually a sign of the US dollar declining, that the Bitcoin is so volatile. Atom: Well that's what inflation is, I mean just inflation in general. So I mean once you understand that, you know, the US government which through the dollar backs just about every currency out there, because you know most currencies are based on... international currencies are either pegged to the dollar or based on a basket of currencies, of which the US dollar is the most prominent portion. So the whole world is backed on the US dollar so because we're printing money and constantly devaluing this dollar it's making everything get all volatile. That's why we're seeing spikes in comodity prices, that's why silver and gold are doing all the nutso things it's doing. I mean, silver is still the same as it was a hundred years ago, still the same as it was ten years ago when it was worth almost nothing. Atlas: Same price... in terms of? Atom: No no no, not same price - but I'm just saying that if you have a silver coin, you know, ten years ago... that's still the same silver coin, the silver didn't change. What changed is that there are more dollars out there, and the silver is worth more of those dollars because the amount of silver hasn't. Atlas: I see. Atom: So that's what it is, inflation is an increase in the supply of money. People think that it's prices going up, but that's price inflation you know. People would like you to misunderstand that, but they're two totally different things. So we can get back on news, I realize that I totally went off on a tangent there. Atlas: Oh it's no problem, let's see what else is out there. There are always two prominent things going on right now, and that's the difficulty change and the Mt Gox fiasco. Atom: Well let's talk Mt Gox then. Atlas: Yeah.
Atom: First off this is probably going to be old hat for some of the folks that have been in the community for a long time but, uhh... I did not actually know what MtGox stood for, and you explained this to me yesterday. Atlas: Uhh yeah, Mt Gox at the base of it's software it's founding code, I don't know how it is now, but it was the Magic: The Gathering trading card software, people would literally trade cards for money using this. Basically, they put Bitcoins into it, replaced the cards, so Bitcoins are traded with the security of the software... it was just treated as just... paper. Atom: Right. -laughsAtlas: So the security was inherently not very tough, given the source, but you can't really blame them too much in the beginning because Bitcoin was so small, it was merely just a geek hobby when they first started Mt Gox, you know? But they just didn't change fast enough and here they are nearly grasping for air, you know? Atom: Well this was inevitable, I mean that's what I think is gonna come out is that this was inevitable. This is a fresh market, this is new: nobody knows what they're doing, and it's very exciting to see as you can probably tell. I'm very excited to see... but uhh, so MtGox is literally Magic: The Gathering Online eXchange, it's an acronym right? Atlas: Right, right... and so I would really just like to see, you know, how banks originally failed in early America, you know. Just, having uhh bank runs, I think it would be very healthy for our economy to see these services fail, and people being more trusting... I mean more cautious with their money and where they put it, you know? I just hope this would teach people that before we, I think that this is a very necessary lesson we need in this economy, because with a lot of freedom comes a lot of responsibility on the inidivudal level... and seeing all these people using these same passwords, and using these really cruddy passwords - it's very worrying, and people are going up to end up just begging for government regulation to help protect themselves, you know? Atom: Well that's the thing of it is that it's all about incentives, most of life and most of the decisions that are made out there are all about incentives. So what we've done with... what we have under normal circumstances is that if you put money in the bank then that money is safe, because not only is the bank gonna protect it but even if they don't protect it, even if they go out of business for whatever reason, then you've got deposit insurance there that's paid for by the tax payers that'll cover your losses up to.. well it used to be $100,000 and then three years ago they raised it to $250,000 per account of course, unlimited number of accounts, and now I believe they've completely raised... they've eliminated the ceiling on that, so now it doesn't matter. So anyways, so there's no risk in being in any banks no matter how risky it is, and in the real world you don't feel that because it's sort of, just the pain is spread around everybody else. When a bank goes out of business taxpayers just pick up the bill and so nobody really feels the pain, but in Bitcoin, in an unregulated new market like this... what you have is nobody's protecting you so you have to protect yourself, and if you protect yourself well I mean you're also not paying any fees, you're also not paying for anybody else. I mean that's the thing about is that if you're a tax payer and a bank goes out of business, well if it's your bank then you're okay with paying for that. But if it's somebody else's bank well then you're still paying for that just as much as you would be if it's your bank.
Atlas: Well you see the benefit of it is that you get to choose your own security, you get to choose security that is competitive on a different level. You don't have... there's accountability for failure when it comes to protection, you know? Atom: Right. Atlas: You could choose a security force to protect your currency that will inevitably sustain itself, hopefully after we get over this obstacle here.
Atom: Well but in the long run, that's what the point is. In the long run what this does is it teaches people that they need to pay attention, that if this is something that they're going to do, if they're going to spend money on this or put value into whatever way, selling products in exchange for Bitcoin or whatever, they need to be paying attention, they need to make sure that the companies that they're working with are above-board and not going to screw them because, you know... so reputation is going to become incredibly important, and then you'll have, you won't need regulation necessarily because people who scam, well, they scam, so you just don't do business with them. Websites that have bad business practices just won't be patronized because at the same time you don't have that safety net there where if they screw you "oh well, it doesn't hurt, it's okay." Atlas: Well I heard a term for that, it's called the "asshole tax" - I forget what the context was. -laughsA natural, thriving society you always have the "asshole tax", and it's usualy very minor compared to the constant ambience of force, you know, by a monopoly on it. Atom: My mother used to tell me, "if you can't be a shining example, at least be a horrible warning." And I think that's what we're seeing right now. Atlas: Yeah, absolutely.
Atom: So, yeah, but let's talk some specifics on the MtGox thing right now. So what actually happened, because there's some misconceptions out there about this, what it appears actually happened is that the site's security was compromised. So we're not actually talking about anything fundamental to the currency, this is just this site specifically, and there have been some other breaches as a result of this, because again, people of not great password behaviours - and this is something I've had to work with myself on too - you know, I mean. Once you get used to the longer passwords, and you get used to typing them then it's not that bad and it's better for the security, otherwise you can just... I don't know what do you suggest Atlas? How are you securing these days? Atlas: How am I securing? Well, umm, I've tried several different methods like originally I used to have a USB drive that was encrypted in a TrueCrypt file that had a database of all my passwords, so if I wanted to use a password I used the one password I used in my head... typed it out on my USB drive to unencrypt my database of passwords, and then I had this long-ass password for every site I had, and I just copy it and pasted it or I usually had a piece of software that did it for me. But nowadays, I usually take two long phrases, mix them up with some numbers in the middle like leet-speak and use a very very long set of numbers that I just happen to remember. It's worked out for me, and I mean since my passwords are so complex, usually no one can... like in a MtGox scenario, if they try to put it through those brute force GPU hashers, it's not going to break open. So even if I were to use the same password for every site, since it's so complex, the point of getting that single master key is very unlikely you know?
Atom: Absolutely. So is that what you're still doing? Atlas: Yeah.
Atom: OK, gotcha. Yeah, I'm still trying to figure out how I want to do security per se, but I was definitely thinking that I have a couple of computers so I would just shove it onto one of my offline computers for the majority of it. But yeah I think that what we're going to see more than anything is that this will be the reason why we start seeing Bitcoin banks show up... and they won't be banks in the conventional sense that people are familiar with where you've got the fractional reserve thing going on. Where you deposit your money and supposedly you can take it out at any time but they're also going to lend it to somebody else, and then they're going to pay you a little bit of interest. That really only works when you have an infinitely expandable money supply, and banks are allowed to print money. So what we're going to see from the Bitcoin community, I think, is banks that actually function as banks used to... which is to say that you use it as a strong-house, that you use it as... that they focus entirely on security, and instead of them paying you interest, you pay them a small fee... maybe like, I don't know, a tenth of a percent or something like that. Atlas: You see, I see it a bit different. I think imagining Bitcoin banks, it's a very limited imagination. What I would like to see is security agencies that go to these independent Bitcoin services, and they make sure it's secure and they give 'em a little label that says "we promise on our integrity that this website is secure" and that every Bitcoin service itself acts as a bank an in exchange for you keeping your Bitcoins with them, they give you services at a lower cost, or whatever. I think I'd prefer that over just, a flat-out bank, you know?
Atom: What's the advantage? What's the advantage for them, because then you are... then you are encouraged to spend money there, because you get discounted goods? Atlas: Yeah, and you feel more loyal to their service - it's good marketing, you know? I think I'd rather see it go that route, and I think it may end up going that route over just a bank that is just all "keep your money". Atom: Well I think that all of these things are not mutually exclusive. I think that that's the beauty of this unregulated market and this brand new thing that we're talking about is that we don't know what's going to happen but basically anything can happen, because there are Bitcoins out there, there are security experts who are looking for a way to monetize their knowledge and to get into this, you know, with a minimal of capital investment and that's a way to do it. Atlas: You see, a free market becomes a market becomes a market of integrity, and what we're going to have have businesses doing is selling integrity, and that's how regulation comes about in a free market is through private licensing agencies that end up, you know... like consumer reports you know? Atom: Yes, I agree. Atlas: Yeah Atom: I think that, yeah, certainly. I think that's more developed though. I think that once you're talking about agencies that are going around, then you're talking about voluntary unions and just all kinds of stuff. You know. I think we've got time.
Atlas: But you know, people are wanting integrity right now, right here. Atom: Yes. Atlas: I mean, I'm seeing a lot of people here are scaring me, some people are just so fanatical about Mt Gox and are just like "oh just give them time, be patient with them" and I just want to beat them on the head. Atom: People don't like change. People don't like change, that's what it is.. it's like you've got these wild swings to one direction or another but people don't like change, people don't like to be told that they were wrong in what they were doing, and I think that's fine but it doesn't change the fact that sometimes reality is just reality. Atlas: I mean I like to go by the philosophy that people are never stupid but only weak and beaten, but sometimes these fiascoes like this kind of make me question that. You know?
Atom: Well I think this is a learning experience, I think the people you've got that are freaking out should be freaking out - I don't think that's a bad thing. I think it will impact their behavior in the future and you'll see a much, much more careful class of people. You'll see people picking better passwords, you know? Even ones that weren't directly affected by this because they saw what can happen, and they don't want to be the guy who gets you know, 612 Bitcoins stolen when they're worth $20 per whatever. I mean, really, the horrible warning thing, I think does it's job. We live in a very very connected society so any time you see these bad events go down, everybody knows about it... and that means that they don't repeat that often, you know? Outside of like a Trojan or something but again that's just about education. Atlas: You see the first time I really thought about Mt Gox and the fact that it's holding all that amount of money and it could go fractional reserve any time, I pulled all my Bitcoins out of there and said "I'm not keeping them in these services anymore". Atom: Yeah Atlas: ... and I'm glad I didn't have my 50 Bitcoins in there for most of this time. Atom: Well yeah, I think that that's just, absolutely... you hit the nail on the head there. Which is that exchanges should not be your bank account, exchanges are a terrible place to place to park large amounts of credits or really anything for that matter. What you should be doing with these accounts, you should be using them to fund, and if you're going to sell you should be transferring to sell and then sitting them there while you sell and that's it, you know? Beyond that, you are at their mercy. You are at the mercy not only of their security, but of their decisions as a company. If they're a company that you trust, then absolutely... but I think that after what we've seen happen that that's sort of a questionable thing. Atlas: I don't even trust my Bitcoins on technology anymore, because it's so volatile, the zeros and ones being stored on magnetic strips or electricity even, I just like it in a physical form. That's why I have them stored on Bitbills in an undisclosed location. -laughsAtom: -laughs- We were talking about the Bitbills, I think that that's a really cool concept and I'm looking forward to looking into it more. Hey, so we've been going a long time already, what do you... let's see... basically we've done our discussion. The way that this show's going to work in the future is that we're going to try to have about a fifteen minute period where we go over the news, and then about a fifteen minute period of discussion at the end of that, that'll be on one or two specific topics and we'll probably throw in interviews as we go and as we get to know members of the community. But for the purposes of this one we've sort of combined those two and just had a general mish-mash and so this is... so yeah, anything else you wanna talk about before we go this week? Atlas: Well um, I've always been interested in the concept of.... there's a guy that came on the forums a while ago, about a week ago, in the newbie forums and he just had an outright title of "I want to put Bitcoins in my body". He wanted to get a Bitbill implanted underneath his skin, or something like that, and I'm like.. that's actually a pretty interesting idea and frankly I kind of got convinced on it. Like, I couldn't see any real harm in me doing it as well, I'm like "ahh that's a good way to save money and keep you from spending it". So you know, so I think it would be pretty cool if we had Bitcoin private keys in a QR code and you just implanted it in your hand or something and if you wanna take it out of your savings you just, I don't know you scan it out or something?
Atom: But if it's a QR code then couldn't you just use like a temporary tattoo?
Atlas: You could use a temporary tattoo but you see tattoos wear away over time... Atom: Sure Atlas ... your skin changes, it's just as volatile as keeping it on a flash drive you know? Atom: Huh. Atlas: ... and I hear people talking about keeping them on flash drives... just don't keep your Bitcoins on a flash drive. If you leave it for five years on there, there's a good chance it'll be of errors if you do that. It's actually not very well tested since flash drive technology is just so recent, we don't really know the long term effects of keeping it in it over a decade, you know? Atom: Right Atlas: So don't keep your Bitcoins on technology in general, that's my philosophy. But, anyways.
Atom: Well I think that as we move forward in and as this market starts to mature a little bit we're definitely going to see more options coming out, there will be definitely be services of whatever kind... I mean who the hell knows what people are going to come up with. Think right now: that is the common factor, that all these sites out there, well not all the sites but many of the sites out there don't seem like they've been done in a very professional way. I was using Bidding Pond the other day and you know, no offense to the creators but that is a slow, archaic, poorly-designed site. Atlas: Well like you said, these people aren't business people. I haven't seen a single good business plan on the Bitcoin forums. These are just tech geeks, and this is just a hobby to them. Atom: Right, absolutely. But as this matures, I think that we're definitely going to see all these options pop up. That's a really interesting thought that you had though, about having businesses actually act as the banks in exchange for the discounts off of their services. I think that's pretty good. Atlas: I've been considering it a lot, I mean I think I have some services like that stuck in my e-mate over there of just business ideas. You know? Everyone. I'm not the only one, there's just tons of people out there, it's just Bitcoin is just such a free, liberating concept it just makes you just think of business ideas on a whim you know? You just keep coming up with them. Atom: Yep. Absolutely.
Atlas: So the future seems pretty bright with Bitcoin, it definitely does. Atom: Yes indeed, and so here we sit today as we record this Mt Gox is still closed follow the hacking incident of last week, but for my money when we see Mt Gox open tomorrow I guarantee you... I'm willing to bet... I'll bet you a couple of Bitcoins that by the time we record this show next week the price will be higher than it is this week. Atlas: Yeah, certainly. I mean I tried to put a bet the other day that Bitcoin will rise above $30 and, I don't know the shares I had people are pretty convinced that yeah, Bitcoin is going to rise above $30 within the next 30 days. Atom: I don't know about that, I'm really... I think that how quick this all happens is really really really up in the air, just because you've got so many different variables in terms of government involvement. Like because of this Mt Gox thing, now there's something of a push for legislation. We've already had Chuck Schumer say that Bitcoins are illegal, that it violates legal tender laws... which is of course just stupid, but go figure he's a politician. Atlas: You see if it does happen, if Bitcoin ends up just becoming totally illegal I think it's just going to be more benefit to the Bitcoin holders if they aren't just scared statists who... Atom: Well it's just like marijuana. It's just like anything that they make illegal, if they make it illegal that will make it a) more expensive and b) only criminals will transact in it because everybody who transacts in it will be a criminal. So of course, you know.
Atlas: The Pirate Bay founder, he gave a statistic that if Bitcoin gets at least like 10% of the black market economy it's going up 600 times, and that's enough for me to retire. So whatever they want to do, whatever they want to do. It sounds pretty selfish but... -laughsAtom: No but I think that a lot of people are looking at this as a speculatory thing and I think that right now the world economy is in such a place that people are looking for things that might actually potentially work. I think that this is something that because it's very hard to manipulate it, is a good bet that it might work. Atom: -laughs- So it's still a bet. Any time that you do anything like this it's still, you know, I don't view this as an investment, I view this as a bet on the future. Atlas: The only weakest link is internet infrastructure, and if they end up to take total control of that, we've still got mesh networking going, we've still got people who set up radio antennas in their back yard.
Atom: Right absolutely. Atlas: Unless the government goes outright war on this, which is really hard to imagine, I think Bitcoin has a really good chance in succeeding, you know?
Atom: So I think you can tell from our perspectives that we're very optimistic about the future of Bitcoin, and are very excited to be part of this growing movement and community. So I think that's going to just about wrap it up for us this week, and until next time, I am Atom. Atlas: and I am Atlas, and this is BitTalk.
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